Legal brothels' sex slavery links

By Nick McKenzie and Maris Beck

LEGAL brothels in Victoria and New South Wales are operating unchecked despite police investigations implicating them in human trafficking, sex slavery and organised crime.

Two Australian Federal Police investigations - Operations Elixation and Raspberry - have identified at least three Melbourne brothels and two in Sydney linked to an international sex slavery ring.

The rear of the Candy Club.Credit:Mal Fairclough

The syndicate allegedly convinces Asian women to fly to Australia for study, and then forces them to work as sex slaves in Sydney and Melbourne.

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A syndicate member, De Jun Zheng, was also involved in the 2009 killing of Melbourne man Abraham Papo, 27, outside a brothel linked to sex trafficking.

Candy Club manager Lin Gao faces accusations.

Evidence suggests that Mr Papo was killed after he tried to help a Korean prostitute he thought was being harmed or held against her will by the syndicate in Sydney.

Mr Papo's parents, Deanna and Marco, have called on state and federal authorities to do more to crack down on brothels linked to sex trafficking.

The state authorities responsible for approving legal brothels have taken no action despite court documents in August detailing federal police allegations that the brothels - or their managers - were involved in organised crime.

After a joint investigation by The Age and the ABC's Four Corners, it can be revealed that the brothels targeted by the police operations include the Candy Club in Richmond, which is licensed by the Victorian government, and the Five Star in Woolloomooloo, Sydney, which operates with local council approval.

In addition to the legal parlours identified in AFP operations, several other legal brothels with alleged links to organised crime are operating unchecked. They include:

■ Inner-city Sydney brothel Nadira, which specialises in Korean prostitutes and is closely linked to the Comancheros outlaw motorcycle club and senior Asian organised crime figures.

■ Regarding House, a brothel in the Melbourne suburb of Heidelberg, where a sex slave allegedly worked in 2009 and which operates from premises whose owner is linked to a Chinese crime syndicate that runs dozens of illegal brothels.

■ 39 Tope Street in South Melbourne, from which authorities removed two women in late 2008 due to sex slavery allegations which were later denied by the licensee.

Senior police sources said the links between organised crime or sex trafficking syndicates and legal brothels highlight a need for stronger regulation, better information sharing between police and regulators - including across state borders - and a possible need for uniform prostitution laws across Australia.

An AFP spokesman told The Age that the agency "continually explores ways to increase the sharing of information and collaboration" in the illegal sex industry.

Since 2003, the AFP's human trafficking teams have undertaken more than 300 investigations and assessments of trafficking allegations, and identified 181 victims, including 147 women forced to work as sex slaves.

Senior state police sources in Victoria and NSW acknowledge that the policing of organised crime in the legal brothel sector is patchy and that the regulation of brothels in both states is often woeful.

Operation Raspberry has gathered testimony from two witnesses who allege that the licensed manager of Richmond's Candy Club, Lin Gao, is part of a syndicate that in 2009 forced two women to work as sex slaves at two other Melbourne brothels, Woolloomooloo brothel Five Star and a second Sydney brothel, which is now under new ownership.

In witness statements tendered in August to a Melbourne court, two Chinese women alleged they were forced to engage in unsafe sex practices in these legal brothels and work up to seven days a week, servicing dozens of men. Every dollar they earned was allegedly returned to the syndicate that sent them from Asia to Australia.

"I did not know how much money I made or how much money I had paid off my debt. My mind was blank. I was just counting down the days," one of the witness statements alleges.

The statements identify Ms Gao as an alleged "big shareholder" and decision maker connected to the trafficking syndicate's Australian operations, although she told The Age through a lawyer that she is not involved in any impropriety.

The AFP court documents contain a large amount of information implicating Ms Gao and several of her Sydney and Melbourne associates in sex trafficking or other crimes, but only one syndicate member has so far been charged.

At least three of these associates are still involved in running legal brothels in Sydney or Melbourne.

One of the few brothels in Victoria against which regulators are attempting to take disciplinary action is Club 234 in Richmond, which remains open. According to court documents, the brothel operates in premises owned by Boris Kogan, who has "substantial links to Russian organised crime".

The licensee of Club 234, Anthony Fletcher, has denied impropriety and is fighting the claims he breached a licence condition by failing to stop Mr Kogan being involved in the brothel business.

An 2010 affidavit from Victoria's Business Licensing Authority and tendered to VCAT states: ''The said police information report [from 2004] states that Boris had purchased the brothel at 234 Coppin street Richmond and he specialises in introducing Russian prostitutes into brothels.

''The report further states that Boris had paid $600,000 for the premises and is now looking for a licence holder to front the brothel for him.''

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Consumer Affairs Victoria told The Age that if it obtained "solid, court-admissible evidence of brothel licensees or approved managers participating in serious or organised criminal activities" it may apply to a court to determine if there are grounds for taking action against licensees.